Smith vows no spending cuts, reinvigorated Heritage Fund in TV address ahead of budget

Alberta’s premier told residents in a televised address Wednesday evening the province will not need to cut spending in its upcoming annual budget despite lower-than-anticipated revenues from oil and gas, and that her government intends to reinvigorate the Alberta Heritage Fund as a way to safeguard the province from earnings shortfalls.

Danielle Smith said during the eight-minute talk she gave on the airwaves of two private broadcasters, including CTV News Edmonton, the resource revenue forecast “will certainly require us to show more restraint than previously predicted.”

She also said anticipated personal income tax cuts will be delayed by a year “and be phased in responsibly,” and that it’s now time for the province to implement a long-term financial plan that delivers a balanced budget “each and every year with predictable and stable revenues to fund our core social programs.”

Smith’s UCP government is scheduled to present its budget on Feb. 29.

Her address comes with the Alberta Teachers’ Association calling for more funding to address ballooning classroom sizes in schools, and the Alberta Medical Association and the Opposition Alberta NDP saying the province’s understaffed health-care system needs more financing.

Smith said her government will “ensure” budget restraint will be “done thoughtfully and with priority given to the programs and services Albertans rely on such as health, education and social supports.”

Her speech addressed the plan to manage finances long-term, saying while revenue from non-renewable resource royalties helped Alberta balance its budget last year — $16 billion of it to balance 2023’s $70-billion budget — her government “simply cannot continue to rely” on such funding, calling it “a recipe for massive debt and cuts to health and education.”

Smith said she rejects the idea of higher income taxes or a sales tax to help increase government revenues as they’re “a recipe for economic decline,” instead focussing on boosting the Heritage Fund, which the former Progressive Conservative government of Peter Lougheed created in 1976 using 30 per cent of Alberta resource revenues to put into savings.

In the 1980s, oil crashed, and that money was used to balance budgets.

The UCP passed a law last year mandating all income earned in the fund “must be invested in the fund rather than spent,” Smith said.

“Instead of spending all that non-renewable surplus cash on the wants of today, we will be fiscally disciplined, invest in the Heritage Fund annually, strategically pay down maturing debt,” she said, adding that Alberta “has one last shot at getting this right.”

“We still have several decades during this global energy transition where nations will desperately need our oil and gas resources for their people,” Smith said.

The Opposition Alberta NDP panned the premier’s plan, saying in a media release following the address that Smith’s government had a chance to “keep promises” made in last year’s provincial election and bolster the struggling health-care system and help people during difficult economic times, “but she didn’t,” with Deputy Leader Christina Gray calling the suggested UCP plans “unacceptable.”

“Instead, Albertans are missing out on at least $272 million in affordability measures Smith promised in the election, as well as any action on lowering utility prices, high rents, or even to offer relief on soaring insurance rates,” Gray said.

“The UCP has failed to fund and support our public education, and is moving forward with the dismantling of your already struggling health care system.”